Vodafone posts uptick in Europe but UK still a challenge
Could the biz still be eyeing up a Brit merger with Virgin?
Communications provider Vodafone posed a 3.5 per cent fall in UK sales to £6.2bn for the full-year 2016, while fourth quarter revenue in Europe grew for the first time in five years.
Group revenue for the biz decreased three per cent to £41bn for the full-year 2016, while earnings before interest, taxes, depreciation and amortization (EBITDA) fell 2.5 per cent to £11.6bn.
Vittorio Colao, Voda's chief exec, said: "This has been a year of strong execution for the Group, returning to organic growth in both revenue and EBITDA for the first time since 2008. We achieved the first quarter of positive revenue growth in Europe since December 2010..."
Overall revenue in Europe decreased by 4.4 per cent to £24.4m for the the full-year. However, fourth quarter sales rose 0.5 per cent in the region to £6.3bn.
The biz attributed European growth to an upturn in its two largest markets: Germany and Italy.
Vodafone has now completed its three-year £20bn Project Spring, with 4G infrastructure now covering 87 per cent of its European business. That has yet to make a significant impact on its financials, however.
Kester Mann, analyst at CCS Insights, said: "There is no doubt there is positive movement in Europe, with the business emerging from a difficult time.
"In the UK Vodafone has more challenges. It is looking to move into multiplay space and a broadband proposition. However, the uptake has been limited so far with only 38,000 broadband customers. There is a lot of competition in the UK market and the wider market."
The company has also come under fire for overcharging customers in Blighty last year, which it attributed to an IT glitch. The company has since said its "complex migration" to a £2bn network and services systems has been resolved.
In February Vodafone announced a joint venture in the Netherlands with Ziggo, part of Liberty Global.
The company was in talks to merge with cable company Liberty Global, which owns Virgin Media, which ended in September 2015. However, there have been rumours that a possibility merger might be back on the table.
In a recent press call Liberty stated its intention to make an investment in the UK.
During its full-year 2016 Vodafone posted "restructuring" costs of £186m, down from £336m the previous year. It paid £50m in respect of the Group’s historic UK tax settlement, down from £100m in the previous year. ®